Wells Fargo Accused of Illegally Seizing Customer Funds
The US-based multinational financial services institution faces class-action lawsuit for skipping legal processes
May 24, 2024 03:00 AM
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TL;DR A Wells Fargo customer in California, Helen Palma, has filed a proposed class-action lawsuit accusing the bank of unlawfully draining funds from her accounts. The lawsuit cites violations of multiple consumer protection laws. This could potentially impact other California residents who faced similar issues within the past four years.
Wells Fargo Faces Class-Action Lawsuit
A Wells Fargo customer in California just filed a proposed class-action lawsuit accusing the bank of draining customers' accounts in blatant violation of consumer protection laws.
The plaintiff, piano teacher Helen Palma, alleges that Wells Fargo unlawfully seized funds from her bank account after she fell behind on credit card payments, reports ClassAction.org.
According to the filing, the bank won a judgment against Palma for outstanding credit card debt. However, the lawsuit claims Wells Fargo abruptly drained Palma's checking and savings accounts without obtaining a required bank levy.
That allegedly violated state laws that mandate banks to give customers proper notice, offer a chance to file a claim of exemption, and leave a minimum balance of $1,900 in their accounts.
In blatant disregard of these rules, Wells Fargo skipped the legal process for a bank levy, which would have prevented it from taking any money out of [the plaintiff's] accounts, and instead unlawfully helped itself to her funds and left [sic] her with only $102.74 to her name.
Palma's class action seeks to protect all California residents who may have had their funds illegally withdrawn by Wells Fargo within the last four years.
The lawsuit accuses Wells Fargo of violating the Truth in Lending Act, Rosenthal Fair Debt Collections Practices Act, and California Unfair Competition Law. According to the suit, Wells Fargo has yet to return the funds to Palma and has never proved that it had authorization to seize them.
This legal battle, if successful, has the potential to not only bring financial restitution to affected customers but also to set a precedent for stricter regulations on how banks manage debt collection. This could be a significant step towards ensuring the financial security of Californians.
This case is not an isolated incident but adds to a series of legal troubles for Wells Fargo, a bank that has faced numerous allegations of misconduct in recent years. The outcome of this lawsuit could have profound implications for consumer protection and banking practices, not just in California but across the nation.
